Customers buy food at a KFC outlet in Shanghai. Photo: IC

 

Fast-food brand Kentucky Fried Chicken (KFC) has launched lawsuits against WeChat accounts over online rumors, a move that would reduce the negative impact of online slander against it, analysts said on Tuesday.

According to a statement KFC published on its official website on Monday, KFC is suing three companies for spreading rumors about KFC's product quality on their WeChat accounts.

KFC has long been plagued by online rumors about its food, such as using deformed chickens with six wings and eight legs, according to the statement.

The recent round of rumors broke out in the first half of 2015, when pictures of deformed chickens that KFC was alleged to have used and texts of consumer complaints circulated on Wechat accounts, said the statement, citing Qu Cuirong, KFC China's president, who stressed that the pictures had been artificially put together using photo-processing software.

According to Qu, about 4,000 posts on Wechat accounts were found to contain rumors about KFC products by the end of April.

KFC responded to the rumors by launching a lawsuit against 10 WeChat accounts that spread rumors about its food quality.

The Wechat accounts were run by three companies, one in Shenzhen in South China's Guangdong Province, and two in North China's Shanxi Province.

An employee at Taiyuan Ling Dian Technology Co, one of the three companies, told the press that the WeChat posts about unclean KFC food were actually forwarded from the WeChat account of an unspecified television station, according to a report of the Shanghai-based Jiefang Daily on Tuesday.

The three companies could not be reached by the Global Times as of press time.

An employee of Shanghai KFC Co told the Global Times Tuesday on condition of anonymity that one of the reasons why KFC is suing the three companies might be because their posts had a relatively large number of readers.

According to the KFC announcement, the three companies were asked to stop their rumors and apologize to KFC.KFC also demanded compensation of up to 1.5 million yuan ($242,000) from each of those companies. 

According to Qu, the posts misled domestic consumers and also harmed the KFC brand.

Yum! Brands Inc, owner of the KFC fast-food chain, saw its net profits slump 9 percent year-on-year in the first quarter of 2015, partly because it was unable to overcome difficulties in the Chinese market, according to a report on the stock information website stock.qq.com on Tuesday.

The net profit of YUM! Restaurants (China) Investment Company Limited, a subsidiary of Yum! Brands Inc, slumped 9 percent year-on-year to less than $1.3 billion in the first three months of 2015.

Kate Nong, who runs a Shanghai-based WeChat account, told the Global Times on Tuesday that it is hard to say whether KFC's fight against online slander could help increase the company's revenues, but stressed that those online rumors had affected KFC's market performance in a negative way in the past.

The Chinese government has been stepping up efforts to crack down on online rumors.

The Supreme People's Court issued a regulation, stating that online writers should take more legal responsibilities for their posts on the Internet, according to an announcement from the Supreme People's Court on October 21, 2014.

Qu said that it is very difficult for enterprises to maintain their reputation on the Internet, but noted that she was encouraged by the central government's crackdown on online rumors.

Lu Songsong, an IT commentator, told the Global Times on Tuesday that if WeChat account operators want to make money, their accounts must have a large number of readers, which pushes them to use buzzworthy headlines in their posts, regardless of their authenticity.

Nong also said that although online rumors are unlikely to disappear in the short term, measures taken by enterprises and the government to crack down upon online slander would increase the difficulty of spreading rumors on the Internet.

Qu stressed that KFC is still collecting evidence of other rumor-spreading WeChat accounts, and that the company would continue to take legal action against those accounts in the future.